When you search google for an online car dealer, what pops up? If the results include a flashy online retailer promising a seamless experience with ‘no haggling,’ and every other word in the description is ‘easy,’ be forewarned. The newest fad in used car buying takes the notion of virtual car sales just a little too far. Not only will you buy your car entirely online, but if you hit a road bump, the chances of speaking to a human who can help are slim-to-none.
We live in the convenience era, a time when we can catch a ride, order take out, or rent a private home right from our smartphones without ever speaking to a human. Companies like Airbnb have transformed the way we do business forever, and as consumers continue demanding access to virtual, smartphone-based buying and selling services, it was only a matter of time before Silicon Valley targeted the used car market.
You’ve probably seen advertisements for these app-based car buying services. With their slick branding and novelty vehicle delivery processes – like vehicle vending machines – buyers are intrigued. But before you get lost in a process designed more for tech-focused entertainment than value, we recommend seriously considering the pros and cons.
The Downside of Buying a Car From a Tech Company
If the idea of buying a used car from an app-based retailer intrigues you, it’s important to realize that you’re not actually buying from an experienced automotive dealer – you’re buying from a Silicon Valley tech executive. These companies operate on a business model that relies heavily on private investors to fund expensive software development and data manipulation capabilities, all designed to direct users through a series of steps that keep them hooked on the process.
Shopping for a car on your smartphone is fun because developers have spent millions designing an app interface that’s enjoyable to use. In a word, it’s slick. The best e-commerce platforms (like Amazon) are easy to navigate and have intelligent filtering capabilities. If you want a white 2012 Mazda CX-5 with 32,153 miles and a clean CARFAX, they’ll find you one or convince you that one of their ‘recommended’ vehicles is a better fit if they can’t. Each step in the process is designed to push you further down the sales funnel. Before you know it, you’re applying for financing.
Prioritizing the convenience and novelty of app-based vehicle shopping and buying instead of carefully vetting the vehicle itself is a lot like putting all the focus on the fairy tale wedding instead of the end result – the marriage. No matter how pretty the dress or Pinterest-worthy the reception, in the end, you’re committed. It’s similar for used car buying and the main reason why in this age of high tech everything, the most satisfied used car owners are those who buy from sellers with brick-and-mortar dealer affiliations and a management hierarchy that has accountability when something goes wrong. If you can’t escalate a problem through a clear pathway to company leadership, you’re setting yourself up for big headaches down the line.
Online Car Buying Isn’t Just a Silicon Valley Trend
National app-based retailers have a big advantage over regional automobile dealerships – they have essentially limitless marketing dollars, so buying a 30-second Super Bowl ad or hiring a big-name celebrity spokesperson barely registers on the balance sheet. Competing for business in the Silicon Valley era is next to impossible for mere mortals. Unfortunately, blanket advertising and highly targeted online campaigns work.
Before you get sucked in by convenience, do a little digging in your community. Today’s car dealers are offering similar online buying services. In fact, dealers are hiring Chief Technology Officers to augment their in-person sales functions with systems designed solely for convenience-oriented buyers. The option is so popular that dealers can even sell nationwide via a start-to-finish online sales process that happens on your time. It’s a convenience-oriented sales strategy that more and more buyers are gravitating toward.
If dealers are mirroring the services offered by app-based retailers, you might be wondering, what’s the difference? There’s a chasm of difference, and it boils down to core capability. When you buy from an app-based retailer, you’re buying from tech experts; when you buy online from an established automotive dealer, you’re buying from car experts. Most outsiders can’t offer access to dedicated service centers or well-stocked parts departments. You’re on your own the second you pick up your vehicle.
When you get right down to it, the used car market is rife with variables. You can’t always guarantee quality when your inventory consists of used vehicles acquired from multiple sources, including auctions and private sellers. Because of that, you have access to solutions when something goes wrong. One visit to Better Business Bureau reveals that the chink in the app-based retailer’s armor is aftermarket service and support.
What To Do When Buyer’s Remorse Sets In
By far the biggest consumer complaints about app-based retailers are issues with problem resolution. Horror stories of dropped calls and endless email exchanges plague these services, resulting in subpar reviews and a legion of unhappy customers. In the state of Ohio, the big-name app-based retailer receives a 2.14/5 rating from the Better Business Bureau. One search reveals the company isn’t BBB accredited and has received well over 2,000 complaints in the last three years.
Among the most frequent complaints are delivery delays. Customers utilize the app to locate and purchase a vehicle, then apply for instant financing. After approval, they’re prompted to set a delivery date. Sounds easy, but for many, that’s where the stress and frustration are only beginning. Buyers report delays of up to a month and issues with quality once they receive their vehicle. Not only that, but the aftermarket protection warranties they spent extra on are limited in coverage (despite promises to the contrary), making unforeseen repairs costly and aggravating.
Financing is another point of contention for many app-based car purchases. Often referred to as a ‘convenience tax,’ interest rates on in-app loans are generally higher. For savvy shoppers, it would seem the quick fix is securing financing from a credit union or other third party, but unfortunately, trying to buy a car without using the associated lender requires complex paperwork and verification. Delays are not uncommon, and some buyers report having to spend hours on emails and phone calls trying to send compliant documents. Many third-party lenders can’t or won’t conform to open-ended and unclear requirements. Buyers then act as intermediaries, brokering their own compliance and tearing their hair out in the process.
Tales of damaged cars, tires with embedded nails, dirty interiors, and misleading specifications are all recounted by dissatisfied buyers who feel bullied by a process designed for simplicity. The distance between the fun and enjoyment of shopping and the reality of their early ownership experience is vast. In many cases, their only resource is a messy exchange process that takes days, if not weeks, while they are forced to garage a car they can’t even drive.
The Solution: Buy Online From a Trusted Dealer
If you want to sidestep the drama without losing the convenience of buying online, there’s an easy fix: find an online car retailer with ties to an actual dealership. So-called ‘traditional’ car dealers are among the most progressive when it comes to virtual sales. Years of experience combined with access to inexpensive e-commerce tools allow dealers to create systems that distance buyers love without the experimental side effect of a retailer with no automotive industry background.
Making the distinction between the two can be tricky because app-based retailers come across as experts. Unfortunately, that’s not usually the case. It’s more of a learn-as-they-go process with buyers playing the role of guinea pig. If you’re not all that interested in being part of a Silicon Valley beta test, the smart move is to locate an established dealer with a robust online sales tool. That way, if something goes wrong, you know you’ll have access to professionals with accountability that have a stake in your complete satisfaction.